Evidence of meeting #12 for Public Accounts in the 42nd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was audit.
A video is available from Parliament.
Conservative
Joël Godin Conservative Portneuf—Jacques-Cartier, QC
But you have nonetheless been able to provide us satisfactory reports and audits in compliance with professional standards. In light of that, I'm wondering why you require that many additional staff at this time.
Assistant Auditor General, Office of the Auditor General of Canada
For the short term, things are going well, and we can survive and provide high-quality work. Longer term, given the nature of our activities, the situation is different. If the objective is to invest in knowledge and everything that entails, the short-term outlook is not sufficient. In the course of the most recent year, we never entertained the prospect of reducing the quality of our work.
Conservative
Joël Godin Conservative Portneuf—Jacques-Cartier, QC
Our briefing note states that "the OAG accomplished the following activities during 2014-2015".
How do you choose which audits to carry out?
Auditor General of Canada, Office of the Auditor General of Canada
There's a way to assess the risks that exist in the various programs. We have a process to identify the various programs within the departments and to identify the risks. Once we have that information, we can carry out an audit. As I said earlier, it's important to bear in mind that half our work consists in financial audits regarding the way a handful of crown corporations prepare financial information. These reports are not part of our performance audits. They're different. For the performance audits, the process is to identify the programs, identify the existing risks within those programs, and select the programs of highest importance.
Conservative
The Chair Conservative Kevin Sorenson
Thank you very much. We'll move now to Mr. Christopherson for seven minutes.
David Christopherson NDP Hamilton Centre, ON
Very good. Thank you, Mr. Chair.
It's good to see you all again.
First up, I just want to comment on paragraph 9 of your opening statements, and underscore this issue of the committee and our performance. I just want to draw attention to the abysmal record in the last few years, in the last Parliament, and how already the numbers are starting to jump. Just doing quick math in terms of what we'll be looking at in the future and the chapters we've picked, I think we're going to come not only close to that 65% we stand a chance of exceeding it, which is just wonderful.
I know that the Auditor General agrees that the more public airing we can give his findings, the more effect they will have and the more we are doing our job. I just wanted to mention that, because it's a good thing.
Then, I want to move to page 12 of the opening statements. Mr. Ferguson, under point 2 of the strategic objectives, if you go to the far right-hand column, discussion of targets not met, and go down to the last point in that column, it says:
Two audits not completed by their statutory deadline.
There's a footnote, which says:
Audits of the Canadian Forces Pension Plan and the Reserve Forces Pension Plan were not completed by their statutory deadlines.
What's going on there?
Auditor General of Canada, Office of the Auditor General of Canada
In general, the information related to those two sets of financial statements wasn't ready for us at the time we did the audit. We've had, and we've expressed, problems with the reserve force pension plan and with being able to do the audit of that in the past.
These have been long-standing issues we've been wrestling with. I believe it was on the reserve force pension plan that we stopped doing the audit for a period of time. Then we came back in to do another audit.
Maybe Mr. Bergin could give us the details.
Ronald Bergin Principal, Office of the Auditor General of Canada
As the Auditor General has said, we've had issues with two audits, the Canadian Forces pension plan and the reserve force pension plan.
In the case of the reserve force pension plan, we were not able to issue an opinion on their 2014 financial statements. We are going in, and we are doing limited procedures to get as much assurance as we can—
NDP
David Christopherson NDP Hamilton Centre, ON
Sorry to interrupt, Mr. Chair. Is that the one that was recently implemented, the one we did a hearing on, the reserve pension plan?
Auditor General of Canada, Office of the Auditor General of Canada
The reserve force pension plan has been around for quite a while. We used to try to do audits on it. We weren't able to express an opinion, so we stopped doing it for a while. Then we came back in, and in 2014 we still weren't able to provide an opinion.
This is the financial statements of the pension plan for the reserve forces.
NDP
David Christopherson NDP Hamilton Centre, ON
I thought I recalled a report from your office that they were dragging their heels in implementing it.
Auditor General of Canada, Office of the Auditor General of Canada
We did a performance audit report also on the reserve force pension plan. That was before I took this position, so I don't have the details of it right now. Certainly this has been an issue that we've raised before.
NDP
David Christopherson NDP Hamilton Centre, ON
I'll bet you if we were to look— Anyway, sorry. I apologize.
Go ahead, sir.
Principal, Office of the Auditor General of Canada
We're in the process of trying to go back in to do a limited audit, so that we can give some opinion on it, but we have not been able to do that yet. We're still trying.
NDP
David Christopherson NDP Hamilton Centre, ON
It says “statutory deadline”. Help me understand. I think I know, but I'm going to ask you. What's a statutory deadline?
Auditor General of Canada, Office of the Auditor General of Canada
Often, under the legislation, it says the organization is supposed to make its audited financial statements public by a certain date. That's what we're measuring, whether they get their financial statements prepared and out by that date required by legislation.
NDP
David Christopherson NDP Hamilton Centre, ON
How can they not? How can they just decide to do it or not do it? It's statutory or it isn't.
Auditor General of Canada, Office of the Auditor General of Canada
I guess in terms of the direct question, that's a question for National Defence to answer.
Certainly there's a requirement, that's why we measure it, and that's why we highlight it in our report. It's to let Parliament know when there are situations where organizations are not meeting their statutory deadlines for issuing those audited statements.
NDP
David Christopherson NDP Hamilton Centre, ON
Is there no penalty whatsoever for missing a statutory deadline? You just have to acknowledge it and move on?
Auditor General of Canada, Office of the Auditor General of Canada
I don't have all of the statutes in front of me, but I cannot recall any statute that has a penalty associated with not meeting that deadline.
NDP
David Christopherson NDP Hamilton Centre, ON
Then the best we have is public pressure and public shaming.
Is there anything we can do? This is an ongoing problem. You've identified it before. It's here again before us. There's nothing to indicate it's going to be any different a year from now. Is there anything we can do as a committee to assist in getting them to meet their legal obligations?
Auditor General of Canada, Office of the Auditor General of Canada
That's a good question.
One of the concerns that I have, and that we're trying to sort out is.... This committee, in particular, doesn't know very much about the work we do on our financial statement audit. When we present reports to this committee, it's about our performance audits. Now we've been including the special examinations, as well, but there isn't anything we bring to the committee about our financial statement audit.
We are trying to put together a report to bring to this committee about our financial audit practice that would help bring these types of issues forward.
I can take back and think about your comment on this particular issue. In the longer term, we're trying to find a better way to bring this information forward, so there's a regular way you can help us with these types of issues.
NDP
David Christopherson NDP Hamilton Centre, ON
Excellent. Thank you.
I think I have moments left.
Just quickly—and it's been touched on by others—on the senior managers' feedback, the 80% to the 59%, I noted your extra notes on page 15. It says “we are analyzing the responses in detail”.
If you touched on that while I was busy looking at other documents, I apologize, but what's your sense, at this point, of why there is such a dramatic departure?